Kodak 2005 Annual Report Download - page 123

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During the fourth quarter of 2003, the Company recorded a net of tax credit of $7 million through discontinued operations for the reversal of an
environmental reserve, which was primarily attributable to positive developments in the Company’s remediation efforts relating to a formerly owned
manufacturing site in the U.S. In addition, during the fourth quarter of 2003, the Company reversed state income tax reserves of $3 million, net of tax,
through discontinued operations due to the favorable outcome of tax audits in connection with a formerly owned business.
NOTE 23: SEGMENT INFORMATION
Current Segment Reporting Structure
As of and for the year ended December 31, 2005, the Company had three reportable segments aligned based on aggregation of similar products and
services: Digital & Film Imaging Systems (D&FIS); Health Group; and Graphic Communications Group. The balance of the Company’s operations,
which individually and in the aggregate do not meet the criteria of a reportable segment, are reported in All Other. A description of the segments is
as follows:
Digital & Film Imaging Systems Segment: The D&FIS segment provides consumers, professionals and cinematographers with digital and
traditional products and services. D&FIS digital products and services include digital capture, kiosks, home printing systems and digital imaging
services. D&FIS traditional products and services include consumer and professional fi lm, photographic paper and photofi nishing, aerial and industrial
fi lm, and entertainment products and services.
Health Group Segment: The Health Group segment provides digital medical imaging and information products, and systems and solutions, which
are key components of sales and earnings growth. These include laser imagers, digital print fi lms, computed and digital radiography systems,
dental radiographic imaging systems, dental practice management software, advanced picture-archiving and communications systems (PACS),
and healthcare information systems (HCIS). Products of the Health Group segment also include traditional analog medical fi lms, chemicals, and
processing equipment. Kodak’s history in traditional analog imaging has made it a leader in this area and has served as the foundation for building its
important digital imaging business. The Health Group segment serves the general radiology market and specialty health markets, including dental,
mammography, orthopedics and oncology. The segment also provides molecular imaging for the biotechnology research market.
Graphic Communications Group Segment: The Graphic Communications Group segment is composed of the Company’s equity investments in KPG
(Kodak’s 50/50 joint venture with Sun Chemical) prior to its acquisition in April 2005; the results of KPG subsequent to the acquisition in April 2005;
the results of Creo Inc., a premier supplier of prepress and workfl ow systems used by commercial printers worldwide, which was acquired in June
2005; NexPress Solutions, Inc., a producer of digital color and black and white printing solutions, which was acquired in May 2004; the results of
Scitex Digital Printing, a provider of continuous inkjet technology, which was acquired in January 2004 and has since been renamed Kodak
Versamark; and the results of Encad, Inc., a maker of wide-format inkjet printers, inks and media. Kodak’s Document Product and Services
organization, which includes market-leading production and desktop document scanners, microfi lm, worldwide service and support and business
process services operations, is also part of this segment.
The Graphic Communications Group segment serves a variety of customers in the creative, in-plant, data center, commercial printing, packaging,
newspaper and digital service bureau market segments with a range of software, media and hardware products that provide customers with a variety
of solutions for prepress equipment, workfl ow software, digital and traditional printing, document scanning and multi-vendor IT services.
All Other: All Other is composed of Kodak’s display and components business for image sensors and other small, miscellaneous businesses. It also
includes development initiatives in consumer inkjet technologies.
Transactions between segments, which are immaterial, are made on a basis intended to refl ect the market value of the products, recognizing
prevailing market prices and distributor discounts. Differences between the reportable segments’ operating results and assets and the
Company’s consolidated fi nancial statements relate primarily to items held at the corporate level, and to other items excluded from segment
operating measurements.
No single customer represented 10% or more of the Company’s total net sales in any period presented.
During the fourth quarter of 2005, the Company changed its methodology for allocating post employment benefi t costs for retirees to the segments to
which these costs are primarily attributable. Prior period results have been adjusted to refl ect this change in methodology.